Rocket Internet Se · HAM:RKET
Rocket Internet — Investor Day (September 2015)
77 slides from Rocket Internet's investor day presentation, Sep 30, 2015
Slide 1: Capital Markets Day
Capital Markets Day September 30th, 2015
Slide 2: Disclaimer
Disclaimer This document is being presented solely for informational purposes and should not be treated as giving investment advice. It is not intended to be (and should not be used as) the sole basis of any analysis or other evaluation. All and any evaluations or assessments stated herein represent
Slide 3: Agenda
Agenda Time Topic Presenter Part 1 9:00 – 9.45 Proven Winners H1 2015 Financials Peter Kimpel CFO Rocket Internet Peter Kimpel 9:45 – 10:00 Update LPV and Underlying Assumptions CFO Rocket Internet Oliver Samwer 10:00 – 10:45 Update Rocket Strategy CEO Rocket Internet Path to Profitability – How to
Slide 4: Proven Winners – H1 2015 Update
Proven Winners – H1 2015 Update 3
Slide 5: Proven Winners with Significant Increase in Revenue/GMV Generation
Proven Winners with Significant Increase in Revenue/GMV Generation €1,372m(1) €93m €436m €174m €102m €567m(1) 2014 H1 Food & Grocery Fashion General Merchandise Home & Living 2015 H1 Source: Respective company’s unaudited consolidated financial statements based on IFRS and management reports Notes:
Slide 6: Continued Strong Growth Across All Proven Winners
Continued Strong Growth Across All Proven Winners Net revenue / GMV Growth H1 2014 – H1 2015 408% 1,006% 332% 295% 206% 142% 117% 119% 98% 72% 81% 47% 41% 27% Overall Pro-forma weighted combined average(1) General Food & Grocery Fashion Home & Living Merchandise Source: Respective company’s unaudite
Slide 7: Continued EBITDA Margin Improvement as Proven Winners Scale
Continued EBITDA Margin Improvement as Proven Winners Scale Average Average (37%) (31%) (1) Adj. EBITDA Margin 2015 H1 (18%) Adj. EBITDA Margin 2014 H1 (11%) n/m (15%) (33%) Adj. EBITDA (33%) Margin(1) (36%) Percentage Point (3%) Improvement (22%) (H1 2015 / H1 2014) (47%) (65%) 6pp (55%) (48%) (2)
Slide 8: Significant Increase in LPV + Net Cash Per Share
Significant Increase in LPV + Net Cash Per Share +38% €44 €36 €32 As of IPO End of April 2015 20-Sep-2015 7
Slide 9: HelloFresh
HelloFresh Key Financials and KPIs Key Highlights FY FY H1 H1 H1 15 marked another period of outstanding growth for EURm 2013 2014 2014 2015 HelloFresh: Net revenue 14.2 69.6 22.2 112.5 Active Subscribers: + 429% vs H1 14 % growth 391.8% 407.9% Total Meals Served: + 359% vs H1 14 Adj. EBITDA(1) (5.5
Slide 10: Delivery Hero Maintains Strong Growth Trajectory in 2015
Delivery Hero Maintains Strong Growth Trajectory in 2015 Orders GMV Revenue (m) Half Yearly (EURm) Half Yearly (EURm) Half Yearly 43 88 39 660 684 85 +226% +202% 154% 303 42 16 34 13 226 2013A 2014A H1 '14 H1 '15 2013A 2014A H1 '14 H1 '15 2013A 2014A H1 '14 H1 '15 Source: Unaudited Delivery Hero inf
Slide 11: foodpanda
foodpanda Key Financials and KPIs Key Highlights EURm FY FY H1 H1 Increasing importance of mobile with 2013 2014 2014 2015 >11.5m mobile app downloads and 51% GMV (EURm) 6.5 116.7 44.8 115.8 of all orders coming from mobile devices % YoY growth n.m. 158.8% Improved retention for mobile and app Net R
Slide 12: Global Fashion Group
Global Fashion Group $ 28 >EUR 1.3bn EUR 76m 12.0m 22m markets ann. GMV cash (1) customers ann. orders Source: Unaudited company information Note: KPIs except customers are based on H1 2015 annualised; total customers excluding Jabong (1) As of end of June 2015, excludes EUR 150 m of committed capit
Slide 13: Global Fashion Group
Global Fashion Group H1 2015 Net revenue EURm (3) 418 (1) 107 (1) 111 95 (1) (1) 59 45 Consolidated (2) (2) (2) (2) RUB 6,884m BRL 368m AED 183m INR 4,107m Source: Respective companies’ unaudited consolidated financial statements based on IFRS and management reports Notes: (1) Converted to EUR using
Slide 14: Global Fashion Group
Global Fashion Group Key Financials and KPIs Key Highlights FY FY H1 H1 EURm Global integration has firmly 2013(3) 2014(3) 2014(3) 2015 Net revenue 317.2 627.4 256.9 418.3 (4) established GFG’s status as the leading online fashion destination for emerging % growth 97.8% 62.8% markets Gross profit 97
Slide 15: Lamoda
Lamoda Key Financials and KPIs Key Highlights FY FY H1 H1 Further widening of assortment portfolio RUBm 2013 2014 2014 2015 with focus on margin improvements as well as Net revenue 5,150.0 9,496.2 3,802.6 6,884.4 private label rollout % growth 84.4% 81.0% Gross profit 2,038.2 3,879.1 1,558,9 3,122.3
Slide 16: Dafiti
Dafiti Key Financials and KPIs Key Highlights FY FY H1 H1 Continued improvement in market position BRLm 2013 2014 2014 2015 and market share of 30%+ in Brazil Net revenue 419.3 592.2 261.0 367.8 % growth 41.2% 40.9% Acquisition of Kanui and Tricae improving Gross profit 143.0 222.4 102.4 138.0 scale
Slide 17: Namshi
Namshi Key Financials and KPIs Key Highlights FY FY H1 H1 AEDm 2013 2014 2014 2015 Continued strong top line growth and gross Net revenue 53.2 167.7 59.8 183.2 margin improvement % growth 215.2% 206.2% Mobile contributed over 73% of total revenue Gross profit 24.3 91.0 31.4 99.4 at end of H1 % margi
Slide 18: Zalora
Zalora Key Financials and KPIs Key Highlights FY FY H1 H1 Strong growth across all countries and EURm 2013 2014 2014 2015 continued market leadership in South East Net revenue 68.8 117.2 43.9 95.1 Asia as well as Australia % growth 70.2% 116.8% Gross profit 26.3 40.0 14.2 31.1 Opened Taiwan-dedicate
Slide 19: Jabong
Jabong Key Financials and KPIs Key Highlights CY CY H1 H1 Continued market leadership in online INRm 2013 2014 2014 2015 fashion with high brand recognition and Net revenue 3,442.9 8,114.1 3,246.5 4,106.9 exclusive lines % growth 135.7% 26.5% Continued development of marketplace Gross profit (321.0)
Slide 20: Lazada
Lazada Key Financials and KPIs Key Highlights FY FY Solidified market leadership in South East Asia USDm H1 2014 H1 2015 2013 2014 supported by cross-border marketplace GMV(2) 94.8 383.8 109.8 433.4 accelerating assortment growth with total active % growth 304.8% 294.7% SKUs reaching 3.2 m by the en
Slide 21: Linio
Linio Key Financials and KPIs Key Highlights FY FY H1 H1 EURm 2013 2014 2014 2015 Accelerated GMV growth (+118.6%) across all GMV(3) 61.5 127.4 39.2 85.6 geographies fostered by international assortment, % growth 107.2% 118.6% higher traffic and mobile penetration Net revenue 47.9 61.9 21.4 37.1 % g
Slide 22: Jumia
Jumia Key Financials and KPIs FY FY H1 H1 Key Highlights EURm 2013 2014 2014 2015 Strong growth across all countries and GMV(2) 34.7 94.5 30.2 130.4 continued market leadership driven by: % growth 172.0% 331.6% Massive Mobile Week event resulting in an Net revenue 29.0 61.8 20.8 75.8 enlargement o
Slide 23: Home24
Home24 Key Financials and KPIs Key Highlights FY FY H1 H1 EURm 2013 2014 2014 2015 H1 2015 revenue growth of 98% Net revenue 92.8 160.1 59.4 117.6 versus previous year % growth 72.5% 97.8% Gross profit 36.2 58.9 24.7 43.4 Revenue growth positively driven by % margin 39.0% 36.8% 41.6% 36.9% order bac
Slide 24: Westwing
Westwing Key Financials and KPIs Key Highlights FY FY H1 H1 EURm 2013 2014 2014 2015 Continued growth driven by customer Net revenue 110.4 183.3 73.8 108.8 loyalty, marketing and focus on % growth 66.1% 47.5% assortment Gross profit 44.9 79.3 32.0 44.7 % margin 40.7% 43.3% 43.4% 41.1% Technology pus
Slide 25: Emerging Stars – H1 2015 Update
Emerging Stars – H1 2015 Update
Slide 26: Emerging Stars – Travel
Emerging Stars – Travel Description Key Metrics FY H1 H1 Leading European travel inspiration platform 2014 2014 2015 operating in 17 countries GTV (€m) 95.6 37.7 93.6 Achieved almost whole of 2014 GTV in first 6 months 2015 only Total orders (k) 491 185 309 H1 2015 total orders are also up by 67% ve
Slide 27: Emerging Stars – Fintech
Emerging Stars – Fintech Description Key Metrics FY H1 H1 Online marketplace for business and consumer 2014 2014 2015 loans Number of newly issued loans 1,126 252 1,603 Newly issued loans grew significantly in H1 ’15 vs. H1 ’14 Total loan applications received 84,184 29,053 63,316 Voted best marketp
Slide 28: Emerging Stars – E-Commerce
Emerging Stars – E-Commerce Description Key Metrics FY H1 H1 Leading Australian online shopping platform for 2014 2014 2015 furniture and homewares H1 ’15 vs. H1 ’14 GMV more than doubled and GMV (AUDm) 9.1 3.4 7.2 number of orders have grown by 78% Total orders (k) 57 22 39 Number of unique visitor
Slide 29: Emerging Stars – Marketplaces
Emerging Stars – Marketplaces Description Key Metrics FY H1 H1 Offers coupons and vouchers from leading 2014 2014 2015 online retailers GTV (€m) 80.4 23.5 72.7 H1 ‘15 compared with H1 ’14: GTV and total Total transactions (k) 1,569 502 984 transactions grew by 209% and 96%, Active retailers 16,218 1
Slide 30: Rocket Internet – Summary of H1 2015 Results
Rocket Internet – Summary of H1 2015 Results
Slide 31: H1 2015 Results Rocket Internet – Consolidated IFRS Income Statement
H1 2015 Results Rocket Internet – Consolidated IFRS Income Statement €m H1 2014 H1 2015 Revenue 67.8 71.3 Revenue includes the key fully consolidated Changes in work in progress 0.7 0.5 Internally produced and capitalized assets entities: Rocket SE, Kanui, Tricae, Pizzabo / La 0.6 2.6 Other operatin
Slide 32: H1 2015 Results Rocket Internet – Consolidated IFRS Balance Sheet
H1 2015 Results Rocket Internet – Consolidated IFRS Balance Sheet Assets Dec 31 Jun 30 Equity and liabilities Dec 31 Jun 30 in €m 2014 2015 in €m 2014 2015 Non-current assets Equity Property, plant and equipment 3.1 2.8 Subscribed capital 153.1 165.1 Intangible assets 9.0 161.7 Capital Reserves 2,48
Slide 33: LPV Update & Key Terms/Conditions
LPV Update & Key Terms/Conditions
Slide 34: LPV Update as of September 20th, 2015
LPV Update as of September 20th, 2015 (€bn) 1.2 7.2 0.2 6.0 0.6 0.2 0.3 0.2 4.6 Proven Emerging Concepts Regional Strategic Other Total LPV Net cash (1) Total LPV Winners Stars Internet Participations Investments end Aug + Net cash Groups Notes: (1) Excludes €550m Convertible bond 33
Slide 35: LPV Distribution by Sector
LPV Distribution by Sector Financial Marketplace Technology 2% Travel 2% (€bn) General 3% Merchandise 6% Others 6% 3.0 Regional Food & Internet Grocery 50% Groups 10% Home & Living 10% Fashion 11% 0.7 0.6 0.6 0.4 0.4 0.2 0.1 0.1 Food & Grocery Fashion Home & Living Regional Internet Others General F
Slide 36: LPV Distribution by Region
LPV Distribution by Region (€bn) Africa 3% Middle-East 1% LatAm 4% 2.9 Europe 5% Others 6% Asia-Pacific Global 48% 7% Global Takeaway Group 25% 1.5 0.4 0.4 0.3 0.3 0.2 0.1 Global Global Takeaway Asia-Pacific Others Europe LatAm Africa Middle-East Group Note: Global includes Global Fashion Group, Wes
Slide 37: LPV: What it is and What it is Not?
LPV: What it is and What it is Not? LPVs are calculated based on the amount invested and price paid by a third party, divided by the stake acquired by such third party Valuations shown represent post-money, post-capital commitment valuations LPV is not a GAAP measure (such as NAVs) LPVs differ from
Slide 38: Key Typical Transaction Terms in Funding Rounds
Key Typical Transaction Terms in Funding Rounds Only 1x non-participating liquidation preference Non-participating: No additional participation in returns above initial investment amount if company sold below valuation Liquidation preferences / anti-dilution provisions fall away in the case of IPO
Slide 39: Update Rocket Strategy
4) ROCKETINTERNET Update Rocket Strategy
Slide 40: Key Achievements since IPO
Key Achievements since IPO +38% €44 €36 Significant €32 Value Creation - Uplift of LPV/Share As of IPO End of April 15 20-Sep-2015 Continued Strong Weighted Revenue / GMV Operating Growth H1 2015 vs H1 2014 EBITDA Improvement Performance of Proven Winners 142% 6pp Investment & Build-Out of New Techn
Slide 41: Our Mission
Our Mission “We identify and build proven online business models predominantly outside of the US and China that satisfy basic consumer needs mainly across four focus sectors – e-commerce, marketplaces, financial technology and travel” 40
Slide 42: What Have we Said in the Past About our Strategy?
What Have we Said in the Past About our Strategy? We Are an Operating Platform Company Relentless Transparency Focus on Being in What We Do Early Long-term Disciplined Market Capital Leadership & Allocation Mid-term Profitability 41
Slide 43: We are an Operating Platform Company
We are an Operating Platform Company 42
Slide 44: We are an Operating Platform Company
We are an Operating Platform Company Our Functional Experts Our Regional Leaders Online Teams Business Teams Business Engineering CRM Legal Development Product BI Operations Recruiting Marketing SEO Finance Warehousing Public Payment Relations Our Strategic And Operational Partners Our Entrepreneurs
Slide 45: We are an Operating Platform Company
We are an Operating Platform Company Key New New Business No. of Countries Partnerships IT Employees Technology Models since IPO At IPO Today Since IPO At IPO Today At IPO Today 10+ 116 119 190 250 3 Plat- Sky forms Rocket Seller Center Mobile 44
Slide 46: Relentless Focus on Being Early - Example Africa Internet Group
Relentless Focus on Being Early - Example Africa Internet Group Tunisia Algeria Uganda Africa AIG Countries Morocco Egypt Ethiopia Target 822 MM Population 77% Senegal Côte d'Ivoire Target Kenya 252 MM 92% Internet Users 92% Ghana Rwanda Nigeria Tanzania Gabon Mozambique Target Mobile 616 MM 75% Cam
Slide 47: Relentless Focus on Being Early - Example Africa Internet Group
Relentless Focus on Being Early - Example Africa Internet Group Marketplaces Classifieds #1 online shopping mall 13 countries #1 real estate classifieds 21 countries #1 online shopping 17 community countries #1 vehicle classifieds 7 #1 logistics platform 13 countries countries New #1 hotel booking p
Slide 48: Long-Term Market Leadership & Mid-Term Profitability – Exciting Set of Proven Winners
Long-Term Market Leadership & Mid-Term Profitability – Exciting Set of Proven Winners Average Age: ~4 Years 2011 2012 2013 2014 2015 Netherlands Netherlands (H1) (H1) Global Fashion Group 1 (1) Re-launch, founded as “Möbelprofi” in 2009 Company launched Profitable on EBITDA
Slide 49: Long-term Market Leadership & Mid-term Profitability
Long-term Market Leadership & Mid-term Profitability Adj. EBITDA (38)% (18)% (18)%(2) Margin(1) €225m(3) Revenues €70m €14m 2013 2014 H1 2015 Country coverage (1) Adjusted for share based compensation expenses and other extraordinary items (2) EBITDA margin for H1 2015 (3) Annualized based on H1 201
Slide 50: Disciplined Capital Allocation – foodpanda
Disciplined Capital Allocation – foodpanda Ownership 50.0% 55.0% 50.0% 50.0% €36m Rocket Invested €9m €61m €37m Primary+ Amount Primary Primary(1) Primary Secondary Post-money €87m €249m €404m €559m Valuation (LPV) ~€235m ~€240m ~€165m ~€65m Jun-14 Dec-14 Mar-15 Apr-15 Annualised Monthly GMV Run Rat
Slide 51: Transparency in What We Do
Transparency in What We Do Quarterly Reporting Quarterly reporting for all Proven Winners on IFRS basis by end of 2015 LPV & Operating Disclosure on quarterly basis Update for significant investments / funding rounds on Cash Balance ongoing basis Simplification of Disclosure Consolidated GFG f
Slide 52: We are Still in the Early Stages of our Journey
We are Still in the Early Stages of our Journey Rocket Internet at IPO Today Mid-term Major Shareholder Model Majority Shareholder Model At IPO average Today average shareholding of shareholding of Shareholding Proven Winners: Proven Winners: >50% 31%(1) 44%(1) (1) LPV weighted ownership stake ex De
Slide 53: Our Value Creation Strategy for the Future
Our Value Creation Strategy for the Future 1 Focus on efficient capital allocation Long-Term Leverage Rocket platform to build market leading companies Continue investing in new pipeline of companies 2 Focus on selected value crystallization — Selling non-core businesses — IPO of selected core busin
Slide 54: Long-term Strategy
4) ROCKETINTERNET Long-term Strategy
Slide 55: Capital Allocation since IPO
Capital Allocation since IPO Total Capital Invested Proven Winners €1.5bn €439m €10m Westwing (32%) €15m Lazada (23%) Emerging Stars, €0.2bn Concepts & Others €39m Home24 (46%) €49m GFG (25%2) Proven Winners €0.4bn €116m foodpanda (50%) 1 Delivery Hero €0.8bn €208m HelloFresh (57%) (1) Includes cont
Slide 56: Significant Secondary Investments to Increase Ownership
Significant Secondary Investments to Increase Ownership Rocket Proven Winners Capital Invested Examples of Increased Ownership Total €439m HelloFresh Ownership Secondary €138m IPO: 37.1% End of September: 57.2% foodpanda Ownership Primary €301m IPO: 44.9% End of September: 50% 55
Slide 57: Rational Approach to Capital Allocation
Rational Approach to Capital Allocation Key Metrics HelloFresh Attractive margin profile Margin Continued enormous growth Growth Potential (408% H1 2014 to H1 2015) Regional Applicability Global platform Valuation Total invested capital €0.2bn Rocket LPV €1.5bn 56
Slide 58: Focus on Risk-Adjusted Returns – HelloFresh Example
Focus on Risk-Adjusted Returns – HelloFresh Example Ownership 36.0% 37.4% 51.7% 57.2% Rocket €0.1m €130m €78m Invested - Secondary Primary + Secondary Secondary(1) Amount Post-money Valuation €30m €131m €624m €2,575m (LPV) €225m €170m €50m €20m (2) Sep-2013 Jun-2014 Feb-2015 Sep-2015 Annualised Run
Slide 59: Cash and Cash Requirements
Cash and Cash Requirements Significant Cash Blue Chip Time to Breakeven 3rd Party Capital Balances Co-Investors Cash at Operating Companies E-commerce: 6-9 years >€1.3bn as of 31 August 2015 €0.9bn of 3rd party Marketplace: 5-7 years Capital Since IPO Average age of Cash at Rocket Proven Winners: In
Slide 60: Focus on Build vs. Buy
Focus on Build vs. Buy Complementary M&A Focus on small, complementary acquisitions to increase scale Platform and realise synergies 59
Slide 61: M&A Focused on Complementary Transactions
M&A Focused on Complementary Transactions Example India Jun-2014 Sep-2014 Nov-2014 Dec-2014 Feb-2015 Feb-2015 No significant M&A transactions planned Delivery Hero was a unique opportunity to create a global leader in a unique high margin business model 60
Slide 62: Key Themes of New Launches
Key Themes of New Launches Disrupting Classifieds Disrupting Food & Groceries Disrupting Travel 61
Slide 63: Mid- and Short-term Strategy
Mid‐ and Short‐term Strategy
Slide 64: Rocket Portfolio Strategy: Continuous Review of Status of Companies
Rocket Portfolio Strategy: Continuous Review of Status of Companies Sizeable or Medium Sized Business Small Business Platform Business Non- Strategic Strategic Strategic Non-Strategic Keep Sell Consolidate Merge Crystalize Value Consolidate 63
Slide 65: Focus on Value Crystallization
Focus on Value Crystallization Example Rationale Selective Proven IPO Winners are Crystalize value in the public markets potential IPO candidates Sell-down of non-strategic stake received in exchange Divest Non-core of besserbetreut.de business Businesses Sale of Motortalk to ebay 64
Slide 66: Focus on Consolidation and Decreasing Complexity
Focus on Consolidation and Decreasing Complexity Example Rationale Creation of Global platform with synergy potential from joint Global private labels, sourcing and technology / best practice Businesses sharing Merge Contribution of smaller businesses into GFG / Dafiti Businesses into Increase in ow
Slide 67: Continued Portfolio Review
Continued Portfolio Review Example Rationale Size in certain markets subscale De-emphasize Capital allocation reduction and focus on select big Businesses city markets Close Non-performing German market not ripe enough for massive rollout Businesses or Focus on higher basket Australian market Region
Slide 68: Key Challenges since IPO
Key Challenges since IPO Emerging Market Development: — Macro-economic slowdown — Weakening of Emerging markets currencies On constant currency basis continued strong growth across all regions Operational challenges: — Change in operating model to marketplace leading to significant increase in compl
Slide 69: Rocket Potential Target Structure
Rocket Potential Target Structure
Slide 70: How Rocket Might Look in 5 Years
How Rocket Might Look in 5 Years Core Cash Core Growth Stage Generative Platform Businesses Companies Large, cash generative Short- / mid-term cash Companies built on companies potentially funding requirements existing network, e.g. listed payments, marketing Continued focus on new concepts Investme
Slide 71: Path to Profitability of Online Businesses
Path to Profitability of Online Businesses
Slide 72: How to Think About Economics in E-commerce
How to Think About Economics in E-commerce Two main focus areas: — Underlying "unit economics" usually pre-marketing as demonstrated by Profit Contribution (PC2) which is profit before G&A and marketing expenses — Customer acquisition costs (CAC) relative to the customer lifetime value (CLV) that ac
Slide 73: Illustrative Framework of Typical Rocket Economics
Illustrative Framework of Typical Rocket Economics Illustrative Rocket Internet Company Unit Economics Focus on ROI (Illustrative) Net Revenue 100% COGS (60)% PC 1 40% Fulfillment Costs (15)% PC 2 25% Marketing Costs (20)% PC 3 5% Personnel & OpEx (10)% Q1 2011 2011 2012 2013 2014 EBITDA (5%) Custom
Slide 74: Zalando Demonstrating Benefit of Aggressive Marketing
Zalando Demonstrating Benefit of Aggressive Marketing Zalando Asos Marketing as a % of Revenues Marketing as a % of Revenues 26.7% 22.6% 17.5% 13.3% 5.3% 5.7% 4.2% 4.1% 3.6% NM 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 (15.1)% (11.6)% (7.2)% (6.5)% 2.8% 4.3% 8.8% 7.5% 5.6% 7.1% 4.5% 4.3% €2,
Slide 75: How to Measure Us
4) ROCKETINTERNET How to Measure Us
Slide 76: 9 Key Targets You Can Measure Us Against
9 Key Targets You Can Measure Us Against 1 Performance: The peak of combined EBITDA losses of our Proven Winners is in 2015 Path to Profitability: Three Proven Winners will reach break-even at group level within 24 months (Q4 2 2017) 3 Capital Requirement: No dilutive capital issuance in the next th
Slide 77: 15min Break
4) ROCKETINTERNET 15min Break